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A mutual fund has a rate of return for five years of 10%, 14%, 10%, and 22% . Calculate the geometric mean. Round to the nearest tenth of a percent.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.2IP

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Question

A mutual fund has a rate of return for five years of 10%, 14%, 10%, and 22% . Calculate the geometric mean. Round to the nearest tenth of a percent.

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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